Labor Law Attorney
Deterioration of Working Conditions and Constructive Dismissal in Israel
While dismissal typically occurs at the employer’s initiative, Israeli labor law also recognizes a concept known as constructive dismissal—or “resignation deemed as dismissal.” Under this doctrine, an employee may leave the workplace voluntarily, yet the resignation is treated as a dismissal for all legal purposes. The Severance Pay Law establishes a closed list of grounds under which a resignation qualifies as dismissal, the most common being a substantial deterioration of working conditions.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
Constructive Dismissal Under Israeli Law
Having a resignation recognized as constructive dismissal carries two significant implications for the employee. First, the employee becomes entitled to full severance pay, as though terminated by the employer. This is particularly meaningful when only 6% of the pension fund was allocated to the severance component rather than the full 8.33%—constructive dismissal entitles the employee to the difference. Second, the employee becomes immediately eligible for unemployment benefits from the National Insurance Institute, without the standard 90-day waiting period that applies to voluntary resignations.
Recognized Grounds for Constructive Dismissal
The Severance Pay Law enumerates several grounds under which a resignation may be treated as dismissal. The four most common are: Health-related resignation: An employee may resign due to health conditions affecting the employee or a family member, provided the medical findings and working conditions justify the resignation. The term “family member” is broadly defined and includes spouses, children, parents, and grandchildren. Relocation of residence: Moving due to marriage, relocating to a spouse’s locality, or moving to an agricultural or development community may constitute valid grounds for constructive dismissal, subject to additional conditions specified in the regulations. Childcare responsibilities: A parent may resign to care for a child under various circumstances—for example, an employee who resigns within nine months of a child’s birth for childcare purposes. Substantial deterioration of conditions: This is one of the most frequently invoked grounds and covers a wide range of situations in which an employee’s working conditions have materially worsened.
Substantial Deterioration of Working Conditions
Section 11 of the Severance Pay Law addresses resignation due to a substantial deterioration of working conditions. The circumstances that may qualify include salary reductions, diminished job scope, workplace harassment, relocation of the workplace, and similar adverse changes. Two critical points apply: first, these changes must have been imposed unilaterally by the employer—if the employee consented to the change, no deterioration of conditions exists. Second, the circumstances do not automatically constitute a deterioration; each case must be evaluated on its own merits. For example, if an employer facing genuine financial difficulties is forced to reduce an employee’s job scope while offering appropriate severance terms, this may not qualify as a deterioration of conditions.
Mandatory Notice to the Employer
For all grounds of constructive dismissal described above, the employee must submit a written letter of resignation stating the reason and attaching supporting documentation. However, when the resignation is based on a substantial deterioration of conditions, the law imposes an additional preliminary requirement: the employee must first notify the employer in writing, specifying the deterioration and providing the employer with a reasonable opportunity to remedy the situation. Only if the employer fails to correct the issue may the employee resign and claim severance pay. An employee who resigns due to worsening conditions without first giving the employer adequate notice risks forfeiting the right to severance compensation.
The Labor Law Division of Mor & Co. Law Firm specializes in representing employers throughout Israel with full compliance with statutory requirements. We understand the importance of safeguarding employers’ legal standing. Claims related to deterioration of working conditions present significant challenges in labor law. If you need expert legal advice and representation, we are here to help at every stage. Contact us via WhatsApp at 050-441-1343 or call 02-595-3322.